On track: Russia plans rail link to Japan

Russia is poised to begin one of its biggest-ever investment projects to link Sakhalin Island in Russia's Far East with the mainland. The ambitious plans could one day result in a direct link between Russia and Japan.

Sakhalin is rich in natural resources and has vast potential for economic growth but its isolation makes transport, especially by sea, vitally important.

The current transport infrastructure cannot even meet the demands of the existing local economy. Almost all the cargo moving between Sakhalin and the mainland is delivered by cargo ships, with no permanent land link.

The marine link between Sakhalin and mainland Russia is already overloaded and is working close to full capacity. Bad weather can hold up transport for up to a month.

So with the cargo turnover expected to grow, the region desperately needs a firm railway connection between the two points.

The idea of building a fixed link here is about 80 years old, and in the 1940s a failed attempt was made to connect the island via a tunnel under the sea. Now the government and Russian Railways are reviving the ambitious project, considering either a tunnel, a railway bridge or a seawall 6.5 kilometres long.

But whatever option they go for, huge finance will be needed. The cost of a seawall is estimated at $US 8 billion, while the bridge, the most expensive option, will cost more than $US 10 billion – five times Sakhalin's annual budget.

The project is very capital intensive and will require huge lump-sum cash injections, accessible only from the State Investment Fund. But it is not viewed as an economically efficient project by private investors as the payback period may take up to 25 years.

However, the local governor, Aleksandr Khoroshavin, has an idea on how to attract private investors.

He said: “About 500 kilometres of railways will go through the lower course of the Amur river, which contains around 7-8 billion cubic metres of timber, which is much sought after on the international market today, but which we can't process simply because of lack of infrastructure. We could propose that the investor builds railways and foundations in exchange for timber.”

If work starts on the link between mainland Russia and Sakhalin Island as planned in 2015, the next step will be a link between Sakhalin and the Japanese island of Hokkaido. Japanese investors have already showed much interest, as it will provide Japan with a direct connection to the Euro-Asian railway network. If these plans are realised, Russia's biggest island will no longer be a remote place, at least not economically.